No surprise here. Telcos hoping for big bucks from connected cars

The mobile industry is counting on connected cars, apparently to the tune of €39 billion in 2018 ($51.91 billion), according to research commissioned by the GSMA. The wireless industry association estimates that 31 percent of cars shipped in 2018 will be connected via a SIM card, contributing to that revenue figure.

Driving (ha!) this change are regulations in various countries are safety regulations. From the report:

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The growth in embedded connectivity is likely to be fuelled in part by regulations in the European Union and Russia making it mandatory for new vehicles to ship with systems that are able to automatically alert emergency services in the event of an accident. In this case, the advantage of an embedded system is that it will still work even if the driver’s handset does not have residual battery or if it is not present in the car. Sales of cars with embedded connectivity should also be boosted by regulation in Brazil that stipulates that new vehicles are equipped with stolen vehicle tracking systems that enable a car to be located remotely.

Such regulations also give governments a way to track people should they be so inclined. Maybe there will be a push back after the NSA domestic and internet spying revelations. Either way, there are still come questions about paying for such connectivity and what it might be used for.

On the consumer side, the survey mentions in-car uses of social networking, weather and music streaming, but not video, which would be a tremendous cost and bandwidth hog. It also mentions remote diagnostic and vehicle management systems as reasons for embedded connectivity, such as the type of systems found on electric vehicles. I wish the survey had spent a bit more time discussing who would pay for this connectivity and the pricing models that would come with it.

It does break down the opportunity into embedded connectivity, tethered connections (where the phone works as a Wi-Fi hotspot for the car) and connectivity via docking mechanism where the phone provides connectivity plus apps. The survey is cool on this latter option believing that regulatory demands will drive more vehicles to embedded while legal and manufacturer demands will favor tethering over integrating a smartphone.

The GSMA survey estimates that by 2015, one in five cars sold will come with embedded connectivity and half of cars on the road will have connectivity by some means, even if it’s just via tethering from a smartphone. That’s a lot of connected cars.